- Return on equity (ROE) at 4.20 pct, up from 3.28 pct a year earlier
- Profits down from Q1 hit by higher costs, signaling slowdown
Financial status of Thai listed companies improved in April-June with a 38.65 percent growth of net profit from a year earlier despite higher fuel costs, reflecting to companies’ efficiency in costs control, according to The Stock Exchange of Thailand’s (SET) research data.
In the second quarter, the companies’ overall ROE rose to 4.20 percent compared with 3.28 percent in the same quarter of last year after posting aggregate net earnings of THB 175.73 billion (approx. USD 5.86 billion), while their sales and services revenues rose 26.15 percent to THB 2.32 billion (USD 77 million), the data in SET Note Quarterly Corporate Update shows.
Even though oil prices rose, companies’ operating profit growth remained strong with a 35.34 percent rise to THB 210.80 billion (USD 7.03 billion) in the second quarter.
However, profits were down compared with the previous quarter. Operating profits fell 2.95 percent, while net profits decreased 15.08 percent, hit by falling gains from the extra items of some big-cap companies.
Most industries reported an increase in net profit; only the services industry posted a drop from a year earlier. The rise was driven up by higher selling prices in resources and industrials, especially petrochemical prices, while higher earnings in the financial industry came from loan expansion, higher lending rates and growing fee income.
Indices used to gauge listed firms’ financial health showed that their status was also strong. They mostly improved from a year earlier but fell from the first quarter following the direction of net profit, with collective second-quarter net profit margin at 7.13 percent, up from 6.54 percent a year ago but down from 9.21 percent in the previous quarter.
Capital expenditure was unchanged at THB 90.61 billion compared with the same period of last year and the previous quarter, while investment in subsidiaries, joint ventures, affiliates and financial instruments eased, resulting to higher cash flow in the second quarter compared with a year earlier. However, cash flows dropped slightly from the previous quarter due to seasonal dividend payments.
In the second quarter, the companies raised THB 26.7 billion (USD 890 million) through equities, down from a year earlier and the previous quarter. Of the amount, THB 7.67 billion was from initial public offerings of four newly-listed firms and two property funds and THB 19.03 billion via secondary equity offerings. The decreases were due to large-scale fundraisings of BTS Group Holdings plc (BTS) in the second quarter of last year and Indorama Ventures plc (IVL) in the previous quarter of this year.
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